Relevance and importance

The case for benchmarking is compelling.

All businesses have the potential to streamline processes, improve performance, increase sales and reduce costs. Benchmarking your own operations against other successful businesses and introducing their best practice into your own business can help achieve this potential. Most business processes are common throughout industry.

For SMEs, successful benchmarking can provide:

	A wake up call.
	Help to make a case for change.
	Practical ideas from others who have already undertaken change to help achieve change.
	The impetus and buy-in to find new ways to do things.
	The opportunity for staff to learn new skills.

It can also result in significant tangible benefits:

	Step changes in performance and innovation
	·Improving quality and productivity
	Improving performance

In the private sector, benchmarking is a successful commercial activity to seek innovation outside the industry paradigm and get ahead of the competition. It is recognised as a valuable tool for learning and is therefore of increasing interest.

In Europe, benchmarking is being used to measure the competitiveness of the European economy as a whole and the European Commission is spearheading among others an Enterprise Benchmarking programme focusing on improving the internal environment and aims to encourage the take-up of benchmarking among SMEs.

Overview

There is not a standard benchmarking process. In practice, individual organisations will customise accepted models to suit their own circumstances but should embrace the following stages:

	Planning / setting objectives.
	Collecting information.
	Analysing the findings.
	Agreeing and implementing recommendations.
	Monitoring and reviewing the benchmarking process and results of the set objectives.
	Recording lessons learned.

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Recommendations and practical tips

Regardless of type and scope of benchmarking, the following tips will improve success rate:

	Objectives clearly defined at outset.
	Scope of work suits objectives.
	Support of senior managers.
	Sufficient resources, skills and guidelines to undertake and complete proposed benchmarking.
	Clear understanding of own organisations performance markers being compared with those of other organisations.
	Agree with comparators to abide by an approved benchmarking code to avoid confidentiality issues - see the European Benchmarking Code of Conduct:.
	Realistic expectations of what improvements can be achieved following benchmarking recommendations.

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Warnings and potential pitfalls

	Benchmarking for the sake of it.
	Focusing only on comparing performance measures without considering the activities which will help achieve good practice.
	Expecting benchmarking will be quick and easy.
	Spending too long on the research part of the process at the expense of gaining support for subsequent recommendations.
	Asking for information from comparators without being willing to share - especially if the information is sensitive.
	Failing to implement recommendations.

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